Start an SIP to save tax on your income

Highlights

Enjoy tax benefits of up to Rs.1.5 lakh under section 80C

Get a lock-in period of just three years

Compound the gains from your investment with ELSS

Start early tax planning through SIPs

Financial stability is a crucial factor in the fulfilment of your aspirations. Be it the desire for a bigger house, quality higher education for your children, a lavish lifestyle, or a comfortable retirement, you need money to acquire it. Adequate financial planning and proper investment of your hard-earned money can compound your savings to fulfill your dreams.

The key is to choose right investment channel to ensure that your money grows well and avoid undue risks. Choosing right investment vehicle also becomes essential so that your gains are not lost in the form of taxes.

Investing in tax savings schemes offered by mutual funds called Equity Linked Savings Scheme (ELSS) through a systematic investment plan (SIP) can be the ladder to your financial success.

How SIPs can help you save tax

A substantial amount of your income can be lost in paying taxes which means you lose out on your savings. SIPs can be one of the best tax saving instrument with high returns on your investments.

You can claim a deduction of up to Rs.1.5 lakh from your taxable income for investing in ELSS through SIPs under Section 80(C) of The Income Tax Act, 1961. With highest tax slab of 30%, you can save up to Rs.45,000 in a year.

Along with inculcating a habit of disciplined investment and ensuring auto-investment management, early tax planning through systematic investment will also enable you to plan your monthly cash balance in a better way.

Get more from ELSS

Apart from being one of the best tax saving schemes, ELSS scores high on almost every parameter to ensure maximum returns on your investments. They are transparent, with high liquidity, and low charges and give better returns than most of the other investment tools.

When compared with other tax saving investments like Public Provident Fund or a 5-year fixed deposit, ELSS promises higher returns along with a low lock-in period of three years. You can start an SIP in ELSS mutual funds with as low as Rs.500 per month.

Start Your Tax Planning Early

The ideal way to start your tax planning is to begin in the month of April itself through an SIP in ELSS rather than waiting till the end of financial year. It not only saves you from the bunch of frantic investments made during end of the year to save taxes, but also accumulate your wealth with higher returns.

ELSS Mutual Funds are hence part of the growth asset class. The difference in returns along with the power of compounding over the long-term results in a huge amount. So, start an SIP in tax-saving ELSS by providing an ECS mandate to deduct a fixed amount from your bank account every month to invest in mutual funds.

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